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2012-12-13_Agenda Packet--Dossier de l'ordre du jourr. City of Saint John Common Council Meeting AGENDA Thursday, December 13, 2012 4:00 pm Council Chamber Si vous avez besoin des services en francais pour une reunion de Conseil Communal, veuillez contacter le bureau de la greffiere communale au 658 -2862. Pages 1. Call to Order 1.1 City Manager: The City of Saint John Government Act 1 -3 1.2 Shared Risk Plan - MOU 1.2.1 Memorandum of Understanding regarding The City of Saint John Pension Plan 1.2.2 Binary Comparison 1.3 City Manager: 2013 General Fund Operating Budget 4-18 2. Approval of Minutes 3. Approval of Agenda 4. Disclosures of Conflict of Interest 5. Consent Agenda 6. Members Comments 7. Proclamation 8. Delegations / Presentations 9. Public Hearings Powered By: S' � i)E- 1 10. Consideration of By -laws 11. Submissions by Council Members 12. Business Matters - Municipal Officers 13. Committee Reports 14. Consideration of Issues Separated from Consent Agenda 15. General Correspondence 16. Supplemental Agenda 17. Committee of the Whole 18. Adjournment 2 The City of Saint John S6ance du conseil communal Le jeudi 13 d6cembre 2012 10 :00 h Salle du conseil Comit6 pl6nier 1.Ouverture de la s6ance Si vous avez besoin des services en frangais pour une reunion de Conseil Communal, veuillez contacter le bureau de la greffiere communale au 658 -2862. S6ance ordinaire 1. Ouverture de la s6ance, suivie de la priere 1.1 Directeur g6n6ral : la ville de Saint John Government Act 1.2 Plan de risques partag6s — MOU 1.2.1 Protocole d'accord concernant la Ville de Saint John plan de retraite 1.2.2 Comparaison binaire 1.3 Directeur general : 2013 budget general de fonctionnement du fonds 2. Approbation du proces- verbal 3. Adoption de Pordre du jour 4. Divulgations de conflits WiWrets 5. Questions soumises a Papprobation du conseil 6. Commentaires pr6sentks par les membres 7. Proclamation 8. D06gations et pr6sentations 9. Audiences publiques 10. Etude des arrWs municipaux 11. Interventions des membres du conseil 12. Affaires municipales evoquees par les fonctionnaires municipaux 13. Rapports deposes par les comites 14. Etude des sujets ecartes des questions soumises a Papprobation du conseil 15. Correspondance generale 16. Ordre du jour supplementaire 17. Comite pknier 18. Levee de la seance R,EPORT TO COMMON COUNCIL l61 J The C4 of W01 John December 13, 2012 His Worship Mayor Mel Norton and Members of Common Council Your Worship and Members of Council: SUBJECT: The City of Saint John Government Act Attached is a letter from Mr. W. Teed respecting the status of contemplated amendments to the City of Saint John Government Act. Mr. Teed will attend the meeting of Common Council this afternoon to provide an update respecting this work. RECOMMENDATION: To Receive and FVe the letter from Mr. Teed. Respectfully submitted, J. Patrick Woods CGA, j City Manager COX &PALMER I cozandpa,merlaw.com New Brunswick I Newfoundland and Labrador I Nova Scotia I Prince Edward Esland December 12, 2012 J. Patrick Woods City Manager City Hall, Market Slip Saint John, NB Dear Pat, Re: City of Saint John Government Act Our File: 112/18/1490 On November 13, 2012, Common Council adopted the following resolution: "RESOLVED that all necessary steps be taken forthwith to amend the governance structure of the City, as set for in An Act to Provide for the Government of the City of Saint John, 1936 (the "Act") including the preparation and presentation of a Private Bill to the Legislative Assembly of New Brunswick as soon as possible, to that effect that: i) Common Council shall have one direct report, namely, from the City Manager, through whom all other departments shall report, including, but not to limit the generality of the foregoing, the City Solicitor, Commissioner of Finance, Treasurer and Common Clerk; and ii) the Act shall be repealed and enacted in both official languages in accordance with the Standing Rules of the Legislative Assembly of New Brunswick. Further, such enactment shall delete all provisions of the Act which have been rendered inoperative due to provincial statutes and regulations or municipal bylaws and shall include the amendment set forth herein to the governance structure of The City of Saint John." Cox & Palmer was retained by you to carry out the necessary legal work to implement the said resolution. To do so, it is necessary to amend the current Act entitled "An Act to Provide for the Government of the City of Saint John, 1936 ", which is a Private Act that was initially enacted in 1912 and substantially amended through 1966 (the "Current Act "). William H. Teed, Q.C. Partner Direct 506 633 2718 Main 506 632 8900 Fax 506 632 8809 Email wteed ®coxandpalmer.com Suite 1500 Brunswick Square 1 Germain Street Saint John NB E21- 4V1 Correspondence PO Box 1324 Saint John E2L 4118 A review was carried out of the Current Act. As a result of that review, it was our opinion that a private bill was necessary to give effect to the November 13, 2012 Common Council resolution (the "Private Bill "). Mr. Carl Killen, MLA for Saint John Harbour, agreed to sponsor the Private Bill so it could be presented to the Legislative Assembly of New Brunswick during the current fall session. The Private Bill was reviewed by the offices of the Clerk of the Legislative Assembly and the Attorney General, neither of whom objected to it being presented to the Legislative Assembly. Necessary notice was given pursuant to the Standing Rules of the Legislative Assembly of New Brunswick, in the Royal Gazette on November 21, 2012, and in the Telegraph Journal on November 15, November 22, and November 29, 2012. The Private Bill was tabled in the Legislative Assembly on December 6, 2012. The Standing Committee on Private Bills will be holding a meeting to consider the Private Bill on Thursday, December 13, 2012 at 9:30am. I will be representing the City at that meeting. If the Private Bill is recommended to the Legislative Assembly for approval, it is anticipated that second and third reading will be given before the Assembly adjourns its fall session. will be present at Common Council's meeting on Thursday, December 13, 2012 to answer questions, if any. At that time, I will be able to convey the Standing Committee's decision. If you have any questions, at anytime, please give me a call. Yours very truly, William . Teed ,..- - WHT/mhm Page 2 r.� c� 0 N r N TM 0 N ri r L a� D H Q ry 0 MEMORANDUM OF UNDERSTANDING REGARDING THE CITY OF SAINT JOHN PENSION PLAN THIS AGREEMENT made the day of December, 2012. AMONG: SAINT JOHN FIRE FIGHTERS ASSOCIATION, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 771 ( "IAFF ") and SAINT JOHN POLICE ASSOCIATION ( "SJPA ") and CUPE, LOCAL 18, SAINT JOHN CITY OUTSIDE WORKERS ( "CUPE 18 ") and CUPE, LOCAL 486 ( "CUPE 486 ") (IAFF, SJPA, CUPE 18 and CUPE 486 are collectively referred to as the "Unions ") and THE CITY OF SAINT JOHN (the "Employer ") WHEREAS the City of Saint John Pension Plan (the "City of Saint John Plan ") was established under The City of Saint John Pension Act, ch. 112, Acts of New Brunswick 1994 (the "City of Saint John Pension Act "); AND WHEREAS the City of Saint John Pension Act was repealed by An Act to Repeal the City of Saint John Pension Act, ch. 41, Acts of New Brunswick 2012 (the "Repealing Act "); c� 0 N r ca N TM 0 N ri r L a� E m a� H Q ry 0 -z- AND WHEREAS under the Repealing Act the pension plan established by the City of Saint John Pension Act (as amended) (i.e., the City of Saint John Plan) continues in force until it is amended, replaced or wound up in accordance with the Pension Benefits Act (New Brunswick); AND WHEREAS the Pension Benefits Act shall be amended to give the council for the City of Saint John the power to amend by resolution the pension plan established by the City of Saint John Pension Act for the purpose of converting the City of Saint John Plan to a shared risk plan; AND WHEREAS the City of Saint John Plan is significantly underfunded; AND WHEREAS on September 15, 2011, the Honourable Blaine Higgs, Minister of Finance, appointed a Task Force consisting of Pierre- Marcel Desjardins, W. Paul McCrossan and Susan Rowland to review public sector pension plans by respecting, among other things, the principles of sustainability, affordability, and secure benefits; AND WHEREAS the Task Force, in consultation with the Unions, (the bargaining agents) and the Employer to the City of Saint John Plan, has reviewed the City of Saint John Plan and has proposed a redesigned pension plan which it recommends be adopted by the Unions and Employer to this Memorandum of Understanding; AND WHEREAS the Unions and the Employer have agreed to convert the City of Saint John Plan in accordance with this Memorandum of Understanding and the enabling legislation; NOW THEREFORE the Unions and Employer enter into this Memorandum of Understanding in respect of the full -time and part-time members of the Unions who are now, or who will become members of the City of Saint John Shared Risk Plan (as defined below) under the changes set out hereinafter; ARTICLE I 1.1 The Employer and the Unions will take all such further actions, execute and deliver such further agreements, instruments and documents in writing and do all such other acts and things as may be necessary and/or desirable to achieve the conversion of the City of Saint John Plan to the City of Saint John Shared Risk Plan, including amending the relevant Collective Agreements (as defined below). ARTICLE II 2.1 Definitions: "ancillary benefit" has the same meaning as is set out in the enabling legislation, and, for greater certainty, also includes future Cost of Living Adjustments ( "COLA"); "base benefits" means, the amount of pension paid or payable to a member at any given time as described under this Memorandum of Understanding. For greater c� 0 N r N T11 0 N M r L E m a� H Q ry 0 -3- certainty, the amount of pension paid is the amount paid to a retired member or eligible dependent at the relevant date and the amount of pension payable is the amount accrued to the credit of an active or deferred member for service rendered in the past and includes any COLA granted up to the relevant date and payable in accordance with any vested early retirement provisions at the relevant date; "Board of Trustees" shall mean the board of trustees for the City of Saint John Shared Risk Plan, which shall be the plan administrator; "City of Saint John Plan" means the City of Saint John Pension Plan, Registration #026920; "City of Saint John Shared Risk Plan" means the City of Saint John Plan that is converted to a Shared Risk Plan as at the Conversion Date under the enabling legislation; "Claimant" means the spouse or estate of the member, or the member's beneficiary; "Collective Agreements" means the following collective agreements covering employees represented by the bargaining units of the Unions: Collective Agreement between The City of Saint John, N.B. and the Saint John Fire Fighters' Association, Local Union No. 771; Working Agreement between The City of Saint John, N.B. and The Canadian Union of Public Employees, Saint John City Hall Employees' Local Union No. 486, C.L.C.; Working Agreement between The Saint John Board of Police Commissioners and The Saint John Police Association; and Working Agreement between The City of Saint John, N.B. and The Canadian Union of Public Employees, Local #18 (Outside Workers). "contribution holidays" means the full or partial reduction of the contributions normally paid by Employees and the Employer into the Shared Risk Plan where required under the Income Tax Act, and as defined in the Funding Policy; "Conversion Date" means January 1, 2013; "Council" means the Common Council of the Employer; "enabling legislation" means the Pension Benefits Act (New Brunswick) and the regulations thereto, as it may be amended from time to time; "Employees" means the relevant full -time and part-time employees covered by the Collective Agreements who now are, or who will become members of the City of Saint John Shared Risk Plan by virtue of their inclusion as full -time and part- time employees in the bargaining units covered by the Collective Agreements; -4- "Funding Policy" means the funding policy for the City of Saint John Shared Risk Plan established in accordance with the enabling legislation and the parameters set out in Appendix A; "Income Tax Act" means the Income Tax Act (Canada) and the regulations thereto, as it may be amended from time to time; "totally and permanently disabled" means in relation to a plan member, suffering from a physical or mental impairment that prevents the member from engaging in any employment for which the member is reasonably suited by virtue of the member's education, training or experience and that can be reasonably expected to last for the remainder of the member's lifetime; "Shared Risk Plan" means a shared risk plan as defined and described in the enabling legislation, and shall have all of the characteristics set out in Article III of this Memorandum of Understanding; ARTICLE III 3.1 The City of Saint John Plan shall be converted to a Shared Risk Plan which will have the following characteristics: Purpose (a) The purpose of a shared risk plan is to provide secure pension benefits to members of the plan without an absolute guarantee but with a risk focused management approach delivering a high degree of certainty that base benefits can be met in the vast majority of potential future economic scenarios. (b) The enabling legislation will extinguish all accrued rights to automatic future a COLA adjustments for all members of the City of Saint John Plan and the R automatic benefit from the effect of future salary increases on the current best N average salary formula for all active members of the City of Saint John Plan. r These automatic future adjustments will be replaced by contingent indexing as c*4 allowed under the Funding Policy. r O N (c) The required funding and risk management framework will be established r pursuant to the enabling legislation mandating that an appropriate allocation be made within the required contribution formula to accrue additional funds such E that there is a reasonable expectation (not guaranteed) that COLA can be granted. m Q(d) The required funding and risk management framework will also be designed to result in a very low probability of base benefits ever being reduced. The Funding Policy will contain specific steps to recover from unacceptable funding levels that will take priority over any reduction of the base benefits. However, in highly --- unlikely circumstances, base benefits may need to be reduced and if this occurs, V— priority will be given to the recapture of this reduction once funding levels allow, Q as specified under the Funding Policy. ry 0 n W 0 N r ca N TI, 0 N M r L a� E m a� H Q ry 0 -5- Benefits (e) The base benefit for retired members, eligible dependents in receipt of a pension and deferred members (which includes, for greater certainty, former members as defined under the City of Saint John Plan) shall be the amount of pension paid or payable at the Conversion Date, plus all COLA adjustments as may be granted by the Board of Trustees from time to time but at no time will include potential future COLA adjustments. (f) The base benefit accrual rate for active members: (i) shall remain unchanged at 2% of salary (including overtime pay) for periods of eligible service prior to the Conversion Date until a change is required under the Funding Policy or is agreed to between the Unions and the Employer; (ii) shall be 1.8% of salary (excluding overtime pay) for periods of eligible service on or after the Conversion Date until a change is required under the Funding Policy or is agreed to between the Unions and the Employer. (g) With respect to pre- Conversion Date benefits: (i) The normal form of pension on retirement for a member who does not have a spouse is a life pension. (ii) The normal form of pension on retirement for a member who has a spouse is a life pension with a survivor pension equal to 60% of the pension the member was receiving prior to his /her death. (h) With respect to post- Conversion Date benefits: (i) The normal form of pension on retirement for a member who does not have a spouse shall be a life pension. (ii) The normal form of pension on retirement for a member who has a spouse shall be a life pension with a survivor pension equal to 60% of the pension the member was receiving prior to his /her death. Members with a spouse at retirement will be subject to the minimum survivor benefits and spousal waiver rules in the enabling legislation. For greater certainty, members are entitled to elect to receive an actuarially adjusted pension for the member's lifetime and the same pension thereafter for the lifetime of the member's surviving spouse in lieu of the foregoing, as contemplated in section 13 of the City of Saint John Plan. (i) With respect to pre- Conversion Date service, members are entitled to the spouse and dependant pension payable on death prior to retirement where death occurs as a result of an accident arising out of or in the course of the member's employment (subject to section 26 of the City of Saint John Plan). With respect to post - Conversion Date service, survivors of members are entitled to the termination value of the member's pension. (j) With respect to pre- Conversion Date service, members are entitled to the following death benefits: the surviving spouse of a vested member who dies prior to retirement is entitled to an annual pension equal to 60 per cent of the annual r.� c� 0 N r ca N T11 0 N M r L E m a� H Q ry 0 pension that would have been payable to the member had the member been entitled to a normal retirement pension at the time of the member's death. If the member dies with no spouse (or if such spouse dies) but leaves children surviving him or her, such children are entitled to a child's pension in accordance with the provisions of subsections 24(2), (2.1) and (4) of the City of Saint John Plan. If the member dies with no spouse or children, the provisions of subsection 24(4.1) of the City of Saint John Plan, which provide for a discretionary dependent pension, apply. With respect to post- Conversion Date service, survivors of members are entitled to the termination value of the member's pension. (k) The minimum benefit set out in section 25 of the City of Saint John Plan shall continue to apply. (1) The base benefit for each active member shall be calculated as follows: (i) for active members with credited service under the City of Saint John Plan prior to the Conversion Date, the base benefit accrual rate as defined in 3.1(f)(i) above multiplied by the best 3 consecutive year average salary (including overtime pay) as defined in the City of Saint John Plan at the Conversion Date times years and fractions thereof of credited service in the City of Saint John Plan at the Conversion Date, subject to the maximum set out in section 3.1(m) below; PLUS (ii) for service on or after the Conversion Date, the base benefit accrual rate in 3.1(f)(ii) times the salary (excluding overtime pay) earned during the relevant year; provided that the maximum salary (excluding overtime) for the purposes of this calculation is $120,000 (excluding overtime) in 2012 (such maximum salary shall be indexed every year after 2012 to the rate used to index the Year's Maximum Pensionable Earnings under the Canada Pension Plan for the year); PLUS (iii) all COLA adjustments as may be granted by the Board of Trustees from time to time, but at no time will include potential future COLA adjustments. (m) For the purposes of paragraph 3.1(1)(i), the base benefit amount determined at the Conversion Date cannot exceed the amount determined under subsection 27(1) of the City of Saint John Plan as at the same date. (n) The eligibility for an immediate pension (early retirement rules) which is also an ancillary benefit shall be as follows: (i) for service prior to the Conversion Date, an unreduced pension when the total of the member's age and pensionable service (which service shall include service before and after the Conversion Date) equals 851. If a 1 For example, a 54 year old with 29 years of service at the Conversion Date retiring in one year would get an unreduced pension on 29 years of service — the pre - Conversion Date service (he or she would have attained Rule of -7- member is not entitled to an unreduced pension, but has at least 2 years of service and is within 10 years of normal retirement date (or is retired on the order of the Council), a reduction of 5% per year applicable for the period from pension commencement date to the date at which the member would have reached 85 points had the member continued in employment (or age 65 if earlier). (ii) for service on or after the Conversion Date for IAFF and SJPA members, who are employed in Public Safety Occupations, an unreduced pension at age 60 with a reduction of 6% per year early for retirements between ages 55 and 60. The normal retirement date for IAFF and SJPA members shall be age 65. (iii) for service on or after the Conversion Date for CUPE 18 and CUPE 486 members and any IAFF and SJPA members not covered under (ii) above, an unreduced pension at age 65 with a reduction of 6% per year early for retirements between the ages 55 and 65. (o) Section 14 of the City of Saint John Plan, which provides for an unreduced pension for members who have attained age 50 and whose employment is terminated by reason of abolition of the member's position by the Council, shall not be a benefit included under the City of Saint John Shared Risk Plan. (p) In the event a member terminates (includes division of pension on marriage breakdown) from the City of Saint John Shared Risk Plan prior to reaching eligibility for an immediate pension, the following shall apply: (i) The current 50% excess contribution rule will be replaced by a 100% excess contribution rule with respect to all service; a (ii) The transfer value of a member or a Claimant will be the termination o value as determined in accordance with the enabling legislation. N r Unless otherwise elected by the member, the amount shall remain in the City of N Saint John Shared Risk Plan until the retirement, death or marriage breakdown of r N the member and the member shall be subject to all future changes, including ri entitlement to future enhancements, declared by the Board of Trustees. r L (q) Members of the IAFF shall be entitled to the disability and death benefits set out in An Act Respecting The Saint John Firefighters' Association, S.N.B. 2010, c.9. p (r) For members who are totally and permanently disabled and in receipt of an annual disability pension for life (the "LTD Pension Benefit ") as of the Conversion Date, the Employer will pay directly such LTD Pension Benefit to each member 85 by the day that is one year from the Conversion Date, taking into account post and pre Conversion Date service) Q and a reduced pension on 1 year of service because this is post Conversion Date service. ry 0 in accordance with the terms of the City of Saint John Plan until such member attains age 65 or ceases to be totally and permanently disabled, if sooner. For greater certainty, if a member returns to work then subsequently becomes totally and permanently disabled again, the member will be treated as being totally and permanently disabled as of the Conversion Date and the Employer shall pay directly such LTD Pension Benefit to such member in accordance with the terms of the City of Saint John Plan. As of the Conversion Date the LTD Pension Benefit under the City of Saint John Plan shall be terminated. Such members who are totally and permanently disabled as of the Conversion Date shall be reinstated as active members of the City of Saint John Shared Risk Plan and shall continue to accrue pensionable service under such plan until the earlier of (i) attaining age 65, (ii) attaining 30 years of pensionable service, (iii) the date upon which the member reaches the maximum pension under subsection 27(1) of the City of Saint John Plan, or (iv) the date the member ceases to be totally and permanently disabled. Such members shall not be required to make contributions to the City of Saint John Shared Risk Plan during such period. With respect to accrued benefits under the City of Saint John Plan up to the Conversion Date, such members shall be deemed to have accrued pensionable service under the City of Saint John Plan from the time the member became totally and permanently disabled up to the Conversion Date (as if they had contributed to that date while disabled). For greater certainty, such pensionable service shall be pre- Conversion Date service. If such member remains totally and permanently disabled until age 65, the salary used in the calculation of such member's pension shall be the current salary earned by other employees covered under the classification in which such member was covered before he or she became totally and permanently disabled or its equivalent. (s) Members who become totally and permanently disabled on or after the Conversion Date shall be entitled to continue to accrue pensionable service under a the City of Saint John Shared Risk Plan and shall not be required to make c contributions to the City of Saint John Shared Risk Plan as long as the member ci continues to be totally and permanently disabled. r (t) The Employer shall obtain long term disability insurance for all its Employees N CD effective as of the Conversion Date. Such long term disability insurance must be N covered under an insured policy with a life insurance company on such terms as 01i the Employer and Unions agree upon. r L Funding and Risk Management E (u) The Employer (on its own behalf and on behalf of the Employees) will remit monthly contributions to the Board of Trustees of the City of Saint John Shared � Risk Plan as is required by the Board of Trustees from time to time. Initially, subject to the Income Tax Act, the contributions required shall be 9% of covered --- payroll (excluding overtime) from CUPE 18 and CUPE 486 Employees and 12% H of covered payroll (excluding overtime) from IAFF and SJPA Employees and Q thereafter as may be required from time to time by the Board of Trustees subject ry 0 c� 0 N r ca N T11 0 N M r L E m a� H Q ry 0 to the triggering mechanism and limitations imposed by the Funding Policy. Initially, the contributions required from the Employer shall be 11.4% of covered payroll (excluding overtime) on behalf of CUPE 18 and CUPE 486 Employees and 15.2% of covered payroll (excluding overtime) on behalf of IAFF and SJPA Employees, representing an average contribution rate of 13.0% of total covered payroll (excluding overtime) and thereafter as may be required from time to time by the Board of Trustees subject to the triggering mechanism and limitations imposed by the Funding Policy. For greater certainty, Employees who were IAFF or SJPA members employed in Public Safety Occupations before accepting non - unionized positions may elect the Employer and Employee contributions described in 4.1(g) below. Commencing April 1, 2013, the Employer shall also be required to make temporary contributions of 17% of covered payroll (excluding overtime) that will cease in 15 years or when the plan achieves a minimum funding level of 150% of liabilities using a 15 year open group method, if earlier, provided that under no circumstances shall such temporary contributions cease before April 1, 2023, subject to the Income Tax Act. In the event that the Income Tax Act requires the cessation of such temporary contributions prior to the expiry of the 10 year period, once such contributions are again permissible under the Income Tax Act, they shall re- commence until an aggregate 10 years of such temporary contributions have been made. For greater certainty, covered payroll (excluding overtime) for purposes of the temporary contributions shall be in respect of all members of the City of Saint John Shared Risk Plan including non -union members referred to in paragraph 4.1(g). The Employer, in its sole discretion, shall be allowed to contribute temporary contributions in advance. Such advanced temporary contributions shall be credited with the net fund rate of return, and shall be used to satisfy the Employer requirement to make future temporary contributions when they become due, subject to the enabling legislation and the Income Tax Act. (v) Contributions will be defined at the inception of the City of Saint John Shared Risk Plan to provide the desired security levels for base and ancillary benefits. As such, the standards established by the Task Force and the enabling legislation are such that the required contributions: (i) Must result in at least a 97.5% probability that base benefits will not be reduced over the 20 year projection period; (ii) Must result in total expected average COLA adjustments of not less in total than 75% of the Consumer Price Index (CPI) on active member benefits plus 75% of the indexing that would have been provided to pensioners' pensions had the plan not been converted; (iii) Must be sufficient to meet the target funding level established at inception of the City of Saint John Shared Risk Plan over a 15 year open group method; -10- (iv) Must not be increased automatically by more than allowed under the Funding Policy; and (v) Subject to paragraph 3.1(w) below, must not be automatically decreased by more than allowed under the Funding Policy. (w) Contribution holidays will only be permitted if required under the Income Tax Act, will apply to both Employees and the Employer equally and will only be applied in the manner allowed under the Funding Policy. (x) A Funding Policy must also be established in accordance to the parameters accepted by the Unions and Employer (attached hereto as Appendix A) to provide the rules that shall be followed for determining both the timing and level of contribution rates, the level of COLA that may be allowed depending on the financial position of the plan and the limits under the Income Tax Act, the level of ancillary benefits, the funding deficit recovery plan and reductions in base benefits and the funding excess utilization plan, among the key features. The Funding Policy must be specifically adopted by the Unions and the Employer. (y) The Funding Policy shall at a minimum contain: (i) Definition of the key terms used in the Funding Policy. (ii) A clear statement of the funding goals. Such funding goals shall meet or exceed the minimum set out in the legislation. (iii) A description of the cost sharing between the Employees and Employer. (iv) A description of the required contributions and changes allowed under what conditions. Such changes in contributions shall be at the sole a discretion of the Trustees and shall be implemented when required and in R the amounts allowed by the Funding Policy. N r (v) A clear statement as to responsibility for plan expenses. For the City of N Saint John Shared Risk Plan, all expenses are paid by the plan unless CD otherwise agreed. N 01i (vi) A deficit recovery plan that shall contain both the priority order and the r level of changes allowed. The deficit recovery plan shall be such that reduction of base benefits would occur as a last step in the deficit recovery plan. a� (vii) Funding excess rules that specify at what funding level excess funds can be used for improvement of benefits and how much of the excess can be allocated for that purpose at each of the annual actuarial valuation of the plan. H Q (viii) A description of the financial measurement basis adopted by the plan. ry 0 r.� c� 0 N r ca N T" 0 N ri r L E m a� H Q ry 0 - 11 - V-nvPrn n n rP (z) A Board of Trustees comprised of 8 trustees will administer the City of Saint John Shared Risk Plan. Four trustees shall be appointed by the Mayor and City Council of the Employer. The other four trustees shall be appointed by the Unions as follows: CUPE 18 shall appoint one trustee, CUPE 486 shall appoint one trustee, SJPA shall appoint one trustee and IAFF shall appoint one trustee. The Board of Trustees must be established by February 1, 2013. In the meantime, the current City of Saint John Plan board of trustees (known as the Pension Board) shall assume the responsibility of the Board of Trustees. At the first meeting of the Board of Trustees, the Board of Trustees shall unanimously select a person who shall be called upon to cast the deciding vote in the event that the Board of Trustees is deadlocked. Such person shall not be a member of the Board of Trustees. (aa) After the Conversion Date, the Employer will have no financial obligations or responsibilities for the City of Saint John Shared Risk Plan save and except for the obligation to make contributions to it as per the terms of this Memorandum of Understanding, the Funding Policy, and any past contributions due for the period prior to the Conversion Date. (bb) Morneau Shepell shall be the interim actuaries for the City of Saint John Shared Risk Plan. The Board of Trustees once constituted shall determine the actuaries for the City of Saint John Shared Risk Plan as soon as practicable. (cc) The Board of Trustees shall be responsible for: (i) All measurements and reporting required by the enabling legislation including regular actuarial valuations and stochastic modelling of the assets and the liabilities of the City of Saint John Shared Risk Plan; (ii) Establishing an investment policy subject to annual review for the purpose of ensuring that the desired security for both the base benefits and the ancillary benefits that are expected to be achieved; (iii) Administering the plan in accordance with the Funding Policy and, for greater clarity, this includes the power to increase or decrease contributions and benefits in accordance with the Funding Policy; and (iv) All other requirements of an administrator under the enabling legislation. -12- ARTICLE IV CONVERSION DETAILS 4.1 The following items describe the key principles of the proposed conversion: (a) The Shared Risk Plan will be effective from and after the Conversion Date. All conversion benefit calculations will be made as of that date without regard to any administrative changes required to effect the conversion. (b) The City of Saint John Shared Risk Plan will be subject to the enabling legislation and the Income Tax Act. (c) Pursuant to subsection 100.52(4) of the enabling legislation, the administrator of the City of Saint John Plan shall transfer all of the assets of the plan to the City of Saint John Shared Risk Plan on the Conversion Date. (d) The Unions confirm that they do not require membership ratification in order to enter into this Memorandum of Understanding or any subsequent agreement concerning the re- design of the City of Saint John Plan. (e) This Memorandum of Understanding does not affect the terms and conditions of employment established through the collective bargaining process negotiated from time to time between the Unions and the Employer, other than as required to convert the City of Saint John Plan to the City of Saint John Shared Risk Plan. (f) Conditions favourable to City of Saint John Plan members not expressly or by necessary implication set out in this Memorandum of Understanding are to be preserved in the City of Saint John Shared Risk Plan. r- (g) Notwithstanding any other provision of this Memorandum of Understanding, the a- benefits for employees (full time and part time) of the City of Saint John who are R not members of any of the Unions, shall be subject to the terms set out in this N Memorandum of Understanding. For greater certainty, such employees shall be r required to contribute 9% of covered payroll (excluding overtime) and the cu c*4 Employer shall be required to contribute 11.4% of covered payroll (excluding Novertime) on behalf of such employees. In addition, where benefits herein are distinguished between (i) CUPE 18 and CUPE 486 members, and (ii) IAFF and `Y' SJPA members, such employees shall be entitled to benefits on the same basis as r the CUPE 18 and CUPE 486 members. However, any such employees who were IAFF members or SJPA members in Public Safety Occupations before accepting a non union position may elect to contribute 12% of covered payroll (excluding overtime) (and the Employer will contribute 15.2% of covered payroll (excluding overtime)) and receive early retirement benefits on the same basis as the IAFF and SJPA members in Public Safety Occupations. (h) Prior to the Conversion Date, the Employer shall pay any outstanding H contributions receivable to the City of Saint John Plan by the Employer, including Q n r.� c� 0 N r N T11 0 N M r L V 11' 1 NQ LLB n -13- any unpaid required special payments and employer current service costs up to the Conversion Date. (i) Reciprocal transfer agreements in effect as at the Conversion Date shall be suspended as of the Conversion Date. The Board of Trustees shall have the power to enter into reciprocal agreements with the sponsors of other pension plans from time to time. Such agreements may provide for the transfer of funds in respect of an employee who transfers from one pension plan to the other and may also provide for the transfer of some or all, of the employee's credited service. (j) Prior to the Conversion Date, Employees may purchase service (including past service, refunded service, service in respect of periods of leaves of absence or other leaves) under the terms of the City of Saint John Plan. On and after the Conversion Date, purchases of service (including purchases of past service, refunded service and service in respect of leaves of absence or other leaves) shall be suspended. The Board of Trustees shall have the power to determine rules regarding purchases of service under the City of Saint John Shared Risk Plan, which rules must be based on the principles underlying the City of Saint John Shared Risk Plan. Initial rules regarding purchases of service must be adopted by the Board of Trustees by no later than one year from the Conversion Date. ARTICLE V GENERAL 5.1 Counterparts This Memorandum of Understanding may be executed in any number of counterparts (including by way of facsimile) and all of such counterparts taken together will be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, each of the signatories hereto has caused this Memorandum of Understanding to be signed by its respective duly authorized officers or representatives as of the date first above written. n c� 0 N r N T" 0 N ri r L E m a� H i n THE CITY OF SAINT JOHN Per: Name: Title: WITNESS: SAINT JOHN FIRE FIGHTERS ASSOCIATION, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 771 Name: Per: Name: Paul Stackhouse Title: President WITNESS: SAINT JOHN POLICE ASSOCIATION Per: Name: Name: Jamie Hachey Title: President WITNESS: Name: CUPE LOCAL 18, SAINT JOHN CITY OUTSIDE WORKERS Per: Name: Michael Meahan Title: President WITNESS: CUPE, LOCAL 486 Per: Name: Name: Paul Johnson Title: President 7 to 0 N r r M N r O N M r L E V a) a 1 N� LL 0 Appendix A — Parameters Used under Risk Management Framework The risk management framework tests conducted on the City of Saint John Shared Risk Plan were carried out using the following assumptions and parameters. Any change to these parameters will change the results of the tests and the required contribution rates to meet the funding goals required by the enabling legislation. The adopted Funding Policy shall adhere to these parameters unless changes are agreed to by the Unions and Employer. Discount rate: 4.5% per annum with future discount rates to be determined consistent the objectives of the plan Mortality basis: UP -94 Generational Table using a projection scale reflecting the most recent life expectancy improvement data. In the future, this assumption will be changed as may be required to reflect latest available information on life expectancy. Other assumptions: Current valuation assumptions except that retirement pattern assumptions were adjusted to allow for the anticipated effect of the retirement rules considered in the costing. Retirement rules: Unreduced at age 60 for IAFF and SJPA members with a reduction of 6% per year early, only applicable to service on or after the Conversion Date. Unreduced at age 65 for CUPE 18 and CUPE 486 members with a reduction of 6% per year early, only applicable to service on or after the Conversion Date. Funding level: Measured using the 15 year open group method. Valuation assets equal to the market value of assets plus the present value of excess contributions over the normal cost for base and ancillary benefits other than potential future COLA divided by the total liabilities, a both at the relevant valuation date. c� 0 N Initial contributions: The level of initial contributions is set at 9% of covered payroll r (excluding overtime) for CUPE 18 and CUPE 486 Employees, c•i 12% of covered payroll (excluding overtime) for IAFF and SJPA NEmployees and Employer contributions shall be 11.4% of covered payroll (excluding overtime) on behalf of CUPE 18 and CUPE 486 `"' Employees and 15.2% of covered payroll (excluding overtime) on r behalf of IAFF and SJPA Employees, representing an average Employer contribution rate of 13.0% of total covered payroll (excluding overtime). A different retirement rule or change to other parameters would lead to a different contribution level. Temporary Contributions: Commencing April 1, 2013, the Employer shall make temporary contributions of 17% of covered payroll (excluding overtime) that will cease in 15 years or when the plan achieves a minimum Q funding level of 150% of liabilities using a 15 year open group < method, if earlier, provided that under no circumstances shall such 0 -2- temporary contributions cease before April 1, 2023, subject to the Income Tax Act. In the event that the Income Tax Act requires the cessation of such temporary contributions prior to the expiry of the 10 year period, once such contributions are again permissible under the Income Tax Act, they shall re- commence until an aggregate 10 years of such temporary contributions have been made. The Employer, in its sole discretion, shall be allowed to contribute temporary contributions in advance. Such advanced temporary contributions shall be credited with the net fund rate of return, and shall be used to satisfy the Employer requirement to make future temporary contributions when they become due, subject to the enabling legislation and the Income Tax Act. Contribution increases: Initial contribution rates are subject to an increase should two future valuations in succession reveal a funding level of less than 100% (with such funding level including the present value of 15 years of excess contributions, but excluding any such increase). Should this occur, Employee initial contribution rates will be increased by 25 %, with this increase being capped at 2.75% of covered payroll (excluding overtime). Any such increase will be 100% matched by the Employer. Any such increase will be eliminated once a future valuation reveals a funding level greater than 105% (with such funding level including the present value of 15 years of excess contributions, excluding any such contribution increase). Contribution decreases: Subject to the priorities established in the funding excess utilization plan in the Funding Policy (discussed below), initial contribution rates are subject to a decrease should a future avaluation reveal a funding level of 150% or over (with such R funding level including the present value of 15 years of excess N contribution, but excluding any such decrease). Should this occur, r Employee initial contribution rates will be decreased by 1.5% of covered payroll (excluding overtime). Any such decrease will also N CD apply to the Employer initial contribution rates. Any such N decrease will be eliminated once a future valuation reveals a rfunding level of less than 140% (with such funding level including the present value of 15 years of excess contributions, excluding any such decrease). E m COLA Annual allocation of funding excess for purposes of granting COLA is 115th of the excess funds that make up the difference between the open group funding level at the valuation date to a maximum of 140% and 105 %, provided there are no contribution --- increases in effect. Funding excesses above 140% would first be V— used to recapture any COLA not previously granted up to the Q Income Tax Act limits in a manner that, to the extent practical, ry 0 c� 0 N r ca N TM 0 N ri r L E m a� H Q ry 0 -3- gives priority to recapturing missed COLA in the order in which it was missed. COLA applies to all members in equal proportion regardless of status at the date COLA is granted. Target Asset Allocation: Initially, 50% Fixed Income, 30% Equity, 10% Real Estate and 10% Infrastructure. Deficit recovery plan: Based on the following steps applied in succession until funding goals are met: (1) Increase contributions as allowed under the Funding Policy; (2) Reduce base benefit accrual rate for future service after the date of implementation of the deficit recovery plan by not more than 5 %; (3) Reduce base benefits on a proportionate basis for all members regardless of membership status for both past and future service in equal proportions. If steps (2) and (3) are implemented, then priority must be given to reversing these changes in reverse order of application before any future COLA is granted. Excess Utilization plan: After the priorities set out in the enabling legislation, the first priority shall be COLA on career average and pension benefits for current year. The second priority shall be COLA on career average and pension benefits for any past years that were missed. The third priority shall be improvements in ancillary benefits. The Unions, in their sole discretion, may determine the priorities of ancillary benefit improvements to include in the Funding Policy up to those that are comparable to the ancillary benefits under the City of Saint John Plan. In addition, the Unions may include in the Funding Policy a reserve for future COLA for up to 10 years as permitted under the enabling legislation. As a fourth priority, potential contribution rate decreases for both Employees and the Employer based on the following: • Contribution rates may decrease only if a valuation reveals a funding ratio of 150% or greater; • If this occurs, Employee contribution rates will be decreased by 1.5% of pay; • Any such decrease will be 100% matched by the Employer and shall reduce first the Employer's temporary \6146841 G1 W O N r N TM O N M r L V 11' 1 NQ LLB n -4- contribution rate if temporary contributions are still in effect at the time of the decrease; and • Any such contribution rate decreases will be eliminated once a future valuation reveals a funding ratio of less than 140 %. n 0 0 Tl LO N r 0 N M�r csb L a� H Q ry 0 MEMORANDUM OF UNDERSTANDING REGARDING THE CITY OF SAINT JOHN PENSION PLAN THIS AGREEMENT made the day of December, 2012. AMONG: SAINT JOHN FIRE FIGHTERS ASSOCIATION, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 771 ( "IAFF ") and SAINT JOHN POLICE ASSOCIATION ( "SJPA ") and CUPE, LOCAL 18, SAINT JOHN CITY OUTSIDE WORKERS ( "CUPE 18 ") and CUPE, LOCAL 486 ( "CUPE 486 ") (IAFF, SJPA, CUPE 18 and CUPE 486 are collectively referred to as the "Unions ") and THE CITY OF SAINT JOHN (the "Employer ") WHEREAS the City of Saint John Pension Plan (the "City of Saint John Plan ") was established under The City of Saint John Pension Act, ch. 112, Acts of New Brunswick 1994 (the "City of Saint John Pension Act "); AND WHEREAS the City of Saint John Pension Act was repealed by An Act to Repeal the City of Saint John Pension Act, ch. 41, Acts of New Brunswick 2012 (the "Repealing Act "); -z- AND WHEREAS under the Repealing Act the pension plan established by the City of Saint John Pension Act (as amended) (i.e., the City of Saint John Plan) continues in force until it is amended, replaced or wound up in accordance with the Pension Benefits Act (New Brunswick); AND WHEREAS the Pension Benefits Act shall be amended to give the council for the City of Saint John the power to amend by resolution the pension plan established by the Citv of Saint John Pension Act for the purpose of converting the City of Saint John Plan to a shared risk plan: AND WHEREAS the City of Saint John Plan is significantly underfunded; AND WHEREAS on September 15, 2011, the Honourable Blaine Higgs, Minister of Finance, appointed a Task Force consisting of Pierre- Marcel Desjardins, W. Paul McCrossan and Susan Rowland to review public sector pension plans by respecting, among other things, the principles of sustainability, affordability, and secure benefits; AND WHEREAS the Task Force, in consultation with the Unions, (the bargaining agents) and the Employer to the City of Saint John Plan, has reviewed the City of Saint John Plan and has proposed a redesigned pension plan which it recommends be adopted by the Unions and Employer to this Memorandum of Understanding; AND WHEREAS the Unions and the Employer have agreed to convert the City of Saint John Plan in accordance with this Memorandum of Understanding and the enabling legislation; NOW THEREFORE the Unions and Employer enter into this Memorandum of Understanding in respect of the full -time and part-time members of the Unions who are now, or who will become members of the City of Saint John Shared Risk Plan (as defined below) under athe changes set out hereinafter; 0 ° ARTICLE I rll LO 1.1 The Employer and the Unions will take all such further actions, execute and N deliver such further agreements, instruments and documents in writing and do all such other acts c and things as may be necessary and/or desirable to achieve the conversion of the City of Saint N John Plan to the City of Saint John Shared Risk Plan, including amending the relevant Collective Agreements (as defined below). csb a� ARTICLE II 2.1 Definitions: a� "ancillary benefit" has the same meaning as is set out in the enabling legislation, and, for greater certainty, also includes future Cost of Living Adjustments ( "COLA"); V- "base benefits" means, the amount of pension paid or payable to a member at any Q given time as described under this Memorandum of Understanding. For greater ry 0 n O O Tl LO N r O N M� csb a� E m a� H Q ry 0 -3- certainty, the amount of pension paid is the amount paid to a retired member or eligible dependent at the relevant date and the amount of pension payable is the amount accrued to the credit of an active or deferred member for service rendered in the past and includes any COLA granted up to the relevant date and payable in accordance with any vested early retirement provisions at the relevant date; "Board of Trustees" shall mean the board of trustees for the City of Saint John Shared Risk Plan, which shall be the plan administrator; "City of Saint John Plan" means the City of Saint John Pension Plan, Registration #026920; "City of Saint John Shared Risk Plan" means the City of Saint John Plan that is converted to a Shared Risk Plan as at the Conversion Date under the enabling legislation; "Claimant" means the spouse or estate of the member, or the member's beneficiary; "Collective Agreements" means the following collective agreements covering employees represented by the bargaining units of the Unions: Collective Agreement between The City of Saint John, N.B. and the Saint John Fire Fighters' Association, Local Union No. 771; Working Agreement between The City of Saint John, N.B. and The Canadian Union of Public Employees, Saint John City Hall Employees' Local Union No. 486, C.L.C.; Working Agreement between The Saint John Board of Police Commissioners and The Saint John Police Association; and Working Agreement between The City of Saint John, N.B. and The Canadian Union of Public Employees, Local #18 (Outside Workers). "contribution holidays" means the full or partial reduction of the contributions normally paid by Employees and the Employer into the Shared Risk Plan where required under the Income Tax Act, and as defined in the Funding Policy; "Conversion Date" means [the date designated as the conversion date as agreed in writing by the signatoiries to this Memorandum of UnderstundifWJanuary 1.2013; "Council" means the Common Council of the Employer; "enabling legislation" means the Pension Benefits Act (New Brunswick) and the regulations thereto, as it may be amended from time to time; "Employees" means the relevant full -time and part-time employees covered by the Collective Agreements who now are, or who will become members of the City of Saint John Shared Risk Plan by virtue of their inclusion as full -time and part - time employees in the bargaining units covered by the Collective Agreements; n 0 0 Tl LO N r O N M�r csb L a� E m a� H Q ry 0 -4- "Funding Policy" means the funding policy for the City of Saint John Shared Risk Plan established in accordance with the enabling legislation and the parameters set out in Appendix A; "Income Tax Act" means the Income Tax Act (Canada) and the regulations thereto, as it may be amended from time to time; "totally and permanently disabled" means in relation to a plan member, suffering from a physical or mental impairment that prevents the member from engaging in any employment for which the member is reasonably suited by virtue of the member's education, training or experience and that can be reasonably expected to last for the remainder of the member's lifetime; "Shared Risk Plan" means a shared risk plan as defined and described in the enabling legislation, and shall have all of the characteristics set out in Article III of this Memorandum of Understanding; ARTICLE III 3.1 The City of Saint John Plan shall be converted to a Shared Risk Plan which will have the following characteristics: Purpose (a) The purpose of a shared risk plan is to provide secure pension benefits to members of the plan without an absolute guarantee but with a risk focused management approach delivering a high degree of certainty that base benefits can be met in the vast majority of potential future economic scenarios. (b) The enabling legislation will extinguish all accrued rights to automatic future COLA adjustments for all members of the City of Saint John Plan and the automatic benefit from the effect of future salary increases on the current best average salary formula for all active members of the City of Saint John Plan. These automatic future adjustments will be replaced by contingent indexing as allowed under the Funding Policy. (c) The required funding and risk management framework will be established pursuant to the enabling legislation mandating that an appropriate allocation be made within the required contribution formula to accrue additional funds such that there is a reasonable expectation (not guaranteed) that COLA can be granted. (d) The required funding and risk management framework will also be designed to result in a very low probability of base benefits ever being reduced. The Funding Policy will contain specific steps to recover from unacceptable funding levels that will take priority over any reduction of the base benefits. However, in highly unlikely circumstances, base benefits may need to be reduced and if this occurs, priority will be given to the recapture of this reduction once funding levels allow, as specified under the Funding Policy. -5- Benefits (e) The base benefit for retired members, eligible dependents in receipt of a pension and deferred members (which includes, for greater certainty, former members as defined under the City of Saint John Plan) shall be the amount of pension paid or payable at the Conversion Date, plus all COLA adjustments as may be granted by the Board of Trustees from time to time but at no time will include potential future COLA adjustments. (f) The base benefit accrual rate for active members: (i) shall remain unchanged at 2% of salary (including overtime pay) for periods of eligible service prior to the Conversion Date until a change is required under the Funding Policy or is agreed to between the Unions and the Employer; (ii) shall be 1.8% of salary (excluding overtime pay) for periods of eligible service on or after the Conversion Date until a change is required under the Funding Policy or is agreed to between the Unions and the Employer. (g) With respect to pre- Conversion Date benefits: (i) The normal form of pension on retirement for a member who does not have a spouse is a life pension. (ii) The normal form of pension on retirement for a member who has a spouse is a life pension with a survivor pension equal to 60% of the pension the member was receiving prior to his /her death. (h) With respect to post- Conversion Date benefits: (i) The normal form of pension on retirement for a member who does not have a spouse shall be a life pension. a(ii) The normal form of pension on retirement for a member who has a spouse CD shall be a life pension with a survivor pension equal to 60% of the pension the R member was receiving prior to his /her death. Members with a spouse at retirement ��� will be subject to the minimum survivor benefits and spousal waiver rules in the enabling legislation. For greater certainty, members are entitled to elect to receive N an actuarially adjusted pension for the member's lifetime and the same pension c thereafter for the lifetime of the member's surviving spouse in lieu of the N foregoing, as contemplated in section 13 of the City of Saint John Plan. vir csb (i) With respect to pre- Conversion Date service, members are entitled to the spouse a� and dependant pension payable on death prior to retirement where death occurs as a result of an accident arising out of or in the course of the member's employment (subject to the ,,..,,*;y...,fas desefibe section 26 of the City of Saint John Plan). With respect to post- Conversion Date service, survivors of members are entitled to the termination value of the member's pension. (j) With respect to pre- Conversion Date service, members are entitled to the � following death benefits: the surviving spouse of a vested member who dies prior Q to retirement is entitled to an annual pension equal to 60 per cent of the annual ry 0 n 0 0 Tl LO N r O N M�r csb L a� E m a� H Q ry 0 pension that would have been payable to the member had the member been entitled to a normal retirement pension at the time of the member's death. If the member dies with no spouse (or if such spouse dies) but leaves children surviving him or her, such children are entitled to a child's pension in accordance with the provisions of subsections 24(2), (2.1) and (4) of the City of Saint John Plan. If the member dies with no spouse or children, the provisions of subsection 24(4.1) of the City of Saint John Plan, which provide for a discretionary dependent pension, apply. With respect to post- Conversion Date service, survivors of members are entitled to the termination value of the member's pension. (k) The minimum benefit set out in section 25 of the City of Saint John Plan shall continue to apply. (1) The base benefit for each active member shall be calculated as follows: (i) for active members with credited service under the City of Saint John Plan prior to the Conversion Date, the base benefit accrual rate as defined in 3.1(f)(i) above multiplied by the best 3 consecutive year average salary (including overtime pay) as defined in the City of Saint John Plan at the Conversion Date times years and fractions thereof of credited service in the City of Saint John Plan at the Conversion Date, subject to the maximum set out in section 3.1(m) below; PLUS (ii) for service on or after the Conversion Date, the base benefit accrual rate in 3.1(f)(ii) times the salary (excluding overtime pay) earned during the relevant year; provided that the maximum salary (excluding overtime) for the purposes of this calculation is $120,000 (excluding overtime) in 2012 (such maximum salary shall be indexed every year after 2012 to the rate used to index the Year's Maximum Pensionable Earnings under the Canada Pension Plan for the year); PLUS (iii) all COLA adjustments as may be granted by the Board of Trustees from time to time, but at no time will include potential future COLA adjustments. (m) For the purposes of paragraph 3.1(1)(1), the base benefit amount determined eannot equate to an initial anfmal pension payable to a membef gia4 at the Conversion Date cannot exceed the amount determined under subsection 27(1) of the City of Saint John Plan as at the same date. (n) The eligibility for an immediate pension (early retirement rules) which is also an ancillary benefit shall be as follows: (i) for service prior to the Conversion Date, an unreduced pension when the total of the member's age and pensionable service (which service shall n O O Tl LO N r O N M� csb L V H Q ry 0 -7- include service before and after the Conversion Date) equals 851. If a member is not entitled to an unreduced pension, but has at least 2 years of service and is within 10 years of normal retirement date (or is retired on the order of the Council), a reduction of 5% per year applicable for the period from pension commencement date to the date at which the member would have reached 85 points had the member continued in employment (or age 65 if earlier). (ii) for service on or after the Conversion Date for IAFF and SJPA members, who are employed in Public Safety Occupations, an unreduced pension at age 60 with a reduction of 6% per year early for retirements between ages 55 and 60. The normal retirement date for IAFF and SJPA members shall be age 65. (iii) for service on or after the Conversion Date for CUPE 18 and CUPE 486 members and any IAFF and SJPA members not covered under (ii) above, an unreduced pension at age 65 with a reduction of 6% per year early for retirements between the ages 55 and 65. (o) Section 14 of the City of Saint John Plan, which provides for an unreduced pension for members who have attained age 50 and whose employment is terminated by reason of abolition of the member's position by the Council, shall not be a benefit included under the City of Saint John Shared Risk Plan. (p) In the event a member terminates (includes division of pension on marriage breakdown) from the City of Saint John Shared Risk Plan prior to reaching eligibility for an immediate pension, the following shall apply: (i) The current 50% excess contribution rule will be replaced by a 100% excess contribution rule with respect to all service; (ii) The transfer value of a member or a Claimant will be the termination value as determined in accordance with the enabling legislation. Unless otherwise elected by the member, the amount shall remain in the City of Saint John Shared Risk Plan until the retirement, death or marriage breakdown of the member and the member shall be subject to all future changes, including entitlement to future enhancements, declared by the Board of Trustees. 1 For example, a 54 year old with 29 years of service at the Conversion Date retiring in one year would get an unreduced pension on 29 years of service — the pre- Conversion Date service (he or she would have attained Rule of 85 by the day that is one year from the Conversion Date, taking into account post and pre Conversion Date service) and a reduced pension on 1 year of service because this is post Conversion Date service. n CD 0 Tl LO N T_ O N M�r csb L E m a� H Q ry 0 (q) Members of the IAFF shall be entitled to the disability and death benefits set out in An Act Respecting The Saint John Firefighters' Association, S.N.B. 2010, C. 9-.,}9. (r) For members who are totally and permanently disabled and in receipt of an annual disability pension for life (the "LTD Pension Benefit ") as of the Conversion Date, the Employer will pay directly such LTD Pension Benefit to each member in accordance with the terms of the City of Saint John Plan until such member attains age 65 or ceases to be totally and permanently disabled, if sooner. For greater certainty, if a member returns to work then subsequently becomes totally and permanently disabled again, the member will be treated as being totally and permanently disabled as of the Conversion Date and the Employer shall nay directly such LTD Pension Benefit to such member in accordance with the terms of the City of Saint John Plan. As of the Conversion Date the LTD Pension Benefit under the City of Saint John Plan shall be terminated. Such members who are totally and permanently disabled as of the Conversion Date shall be reinstated as active members of the City of Saint John Shared Risk Plan and shall continue to accrue pensionable service under such plan until the earlier of (i) attaining age 65, (ii) attaining 30 years of pensionable service, (iii) the date upon which the member reaches the maximum pension under subsection 27(1) of the City of Saint John Plan, or (iv) the date the member ceases to be totally and permanently disabled. Such members shall not be required to make contributions to the City of Saint John Shared Risk Plan during such period. With respect to accrued benefits under the City of Saint John Plan up to the Conversion Date, such members shall be deemed to have accrued pensionable service under the City of Saint John Plan from the time the member became totally and permanently disabled up to the Conversion Date (as if they had contributed to that date while disabled). For greater certainty, such pensionable service shall be pre- Conversion Date service. If such member remains totally and permanently disabled until age 65, the salary used in the calculation of such member's pension shall be the current salary earned by other employees covered under the classification in which such member was covered before he or she became totally and permanently disabled or its equivalent. (s) Members who become totally and permanently disabled on or after the Conversion Date shall be entitled to continue to accrue pensionable service under the City of Saint John Shared Risk Plan and shall not be required to make contributions to the City of Saint John Shared Risk Plan as long as the member continues to be totally and permanently disabled. (t) The Employer shall obtain long term disability insurance for all its eleyeesEmnloyees effective as of the Conversion Date. Such long term disability insurance must be covered under an insured policy with a life insurance company on such terms as the Employer and Unions agree upon. Funding and Risk Management n CD 0 Tl LO N r O N M�r tLb L E m a� H Q ry 0 (u) The Employer (on its own behalf and on behalf of the Employees) will remit monthly contributions to the Board of Trustees of the City of Saint John Shared Risk Plan as is required by the Board of Trustees from time to time. Initially, subject to the Income Tax Act, the contributions required shall be 9% of covered payroll (excluding overtime) from CUPE 18 and CUPE 486 Employees and 12% of covered payroll (excluding overtime) from IAFF and SJPA Employees and thereafter as may be required from time to time by the Board of Trustees subject to the triggering mechanism and limitations imposed by the Funding Policy. Initially, the contributions required from the Employer shall be 11.4% of covered payroll (excluding overtime) on behalf of CUPE 18 and CUPE 486 Employees and 15.2% of covered payroll (excluding overtime) on behalf of IAFF and SJPA Employees, representing an average contribution rate of 13.0% of total covered payroll (excluding overtime) and thereafter as may be required from time to time by the Board of Trustees subject to the triggering mechanism and limitations imposed by the Funding Policy. For greater certainty, Employees who were IAFF or SJPA members employed in Public Safety Occupations before accepting non - unionized positions may elect the Employer and Employee contributions described in 4.1(g) below. Commencing April 1. 2013. the Employer shall also be required to make temporary contributions of 17% of covered payroll (excluding overtime) that will cease in 15 years or when the plan achieves a minimum funding level of 150% of liabilities using a 15 year open group method, if earlier, provided that under no circumstances shall such temporary contributions cease before ,April 1,=2023 subject to the Income Tax Act. In the event that the Income Tax Act requires the cessation of such temporary contributions prior to the expiry of the 10 year period, once such contributions are again permissible under the Income Tax Act, they shall re- commence until an aggregate 10 years of such temporary contributions have been made. For greater certainty, covered payroll (excluding overtime) for purposes of the temporary contributions shall be in respect of all members of the City of Saint John Shared Risk Plan including non -union members referred to in paragraph 4.1(g). The Employer, in its sole discretion, shall be allowed to contribute temporary contributions in advance. Such advanced temporary contributions shall be credited with the net fund rate of return, and shall be used to satisfy the Employer requirement to make future temporary contributions when they become due, subiect to the enabling legislation and the Income Tax Act. (v) Contributions will be defined at the inception of the City of Saint John Shared Risk Plan to provide the desired security levels for base and ancillary benefits. As such, the standards established by the Task Force and the enabling legislation are such that the required contributions: (i) Must result in at least a 97.5% probability that base benefits will not be reduced over the 20 year projection period; (ii) Must result in total expected average COLA adjustments of not less in total than 75% of the Consumer Price Index (CPI) on active member -10- benefits plus 75% of the indexing that would have been provided to pensioners' pensions had the plan not been converted; (iii) Must be sufficient to meet the target funding level established at inception of the City of Saint John Shared Risk Plan over a 15 year open group method; (iv) Must not be increased automatically by more than allowed under the Funding Policy; and (v) Subject to paragraph 3.1(w) below, must not be automatically decreased by more than allowed under the Funding Policy. (w) Contribution holidays will only be permitted if required under the Income Tax Act, will apply to both Employees and the Employer equally and will only be applied in the manner allowed under the Funding Policy. (x) A Funding Policy must also be established in accordance to the parameters accepted by the Unions and Employer (attached hereto as Appendix A) to provide the rules that shall be followed for determining both the timing and level of contribution rates, the level of COLA that may be allowed depending on the financial position of the plan and the limits under the Income Tax Act, the level of ancillary benefits, the funding deficit recovery plan and reductions in base benefits and the funding excess utilization plan, among the key features. The Funding Policy must be specifically adopted by the Unions and the Employer. (y) The Funding Policy shall at a minimum contain: (i) Definition of the key terms used in the Funding Policy. a °o (ii) A clear statement of the funding goals. Such funding goals shall meet or r l exceed the minimum set out in the legislation. LO (iii) A description of the cost sharing between the Employees and Employer. N r N (iv) A description of the required contributions and changes allowed under M� what conditions. Such changes in contributions shall be at the sole discretion of the Trustees and shall be implemented when required and in the amounts allowed by the Funding Policy. m (v) A clear statement as to responsibility for plan expenses. For the City of a� Saint John Shared Risk Plan, all expenses are paid by the plan unless otherwise agreed. (vi) A deficit recovery plan that shall contain both the priority order and the --- level of changes allowed. The deficit recovery plan shall be such that H reduction of base benefits would occur as a last step in the deficit recovery Q plan. n n O O Tl LO N r O N M� csb L a� E m a� H Q ry 0 - 11 - (vii) Funding excess rules that specify at what funding level excess funds can be used for improvement of benefits and how much of the excess can be allocated for that purpose at each of the annual actuarial valuation of the plan. (viii) A description of the financial measurement basis adopted by the plan. Governance (z) A Board of Trustees comprised of 8 trustees will administer the City of Saint John Shared Risk Plan. Four trustees shall be appointed by the Mayor and City Council of the Employer. The other four trustees shall be appointed by the Unions as follows: CUPE 18 shall appoint one trustee, CUPE 486 shall appoint one trustee, SJPA shall appoint one trustee and IAFF shall appoint one trustee. The Board of Trustees must be established by {February 1, ''n2013. In the meantime, the current City of Saint John Plan board of trustees (known as the Pension Board) shall assume the responsibility of the Board of Trustees. At the first meeting of the Board of Trustees, the Board of Trustees shall unanimously select a person who shall be called upon to cast the deciding vote in the event that the Board of Trustees is deadlocked. Such person shall not be a member of the Board of Trustees. (aa) After the Conversion Date, the Employer will have no financial obligations or responsibilities for the City of Saint John Shared Risk Plan save and except for the obligation to make contributions to it as per the terms of this Memorandum of Understanding, the Funding Policy, and any past contributions due for the period prior to the Conversion Date. (bb) Morneau Shepell shall be the interim actuaries for the City of Saint John Shared Risk Plan. The Board of Trustees once constituted shall determine the actuaries for the City of Saint John Shared Risk Plan as soon as practicable. (cc) The Board of Trustees shall be responsible for: (i) All measurements and reporting required by the enabling legislation including regular actuarial valuations and stochastic modelling of the assets and the liabilities of the City of Saint John Shared Risk Plan; (ii) Establishing an investment policy subject to annual review for the purpose of ensuring that the desired security for both the base benefits and the ancillary benefits that are expected to be achieved; (iii) Administering the plan in accordance with the Funding Policy and, for greater clarity, this includes the power to increase or decrease contributions and benefits in accordance with the Funding Policy; and (iv) All other requirements of an administrator under the enabling legislation. -12- ARTICLE IV CONVERSION DETAILS 4.1 The following items describe the key principles of the proposed conversion: (a) The Shared Risk Plan will be effective from and after the Conversion Date. All conversion benefit calculations will be made as of that date without regard to any administrative changes required to effect the conversion. (b) The City of Saint John Shared Risk Plan will be subject to the enabling legislation and the Income Tax Act. (c) Pursuant to subsection 100.52(4) of the enabling legislation, the administrator of the City of Saint John Plan shall transfer all of the assets of the plan to the City of Saint John Shared Risk Plan on the Conversion Date. (d) The Unions confirm that they do not require membership ratification in order to enter into this Memorandum of Understanding or any subsequent agreement concerning the re- design of the City of Saint John Plan. (e) This Memorandum of Understanding does not affect the terms and conditions of employment established through the collective bargaining process negotiated from time to time between the Unions and the Employer, other than as required to convert the City of Saint John Plan to the City of Saint John Shared Risk Plan. (f) Conditions favourable to City of Saint John Plan members not expressly or by necessary implication set out in this Memorandum of Understanding are to be preserved in the City of Saint John Shared Risk Plan. r- 0. (g) Notwithstanding any other provision of this Memorandum of Understanding, the 0 benefits for employees (full time and part time) of the City of Saint John who are not members of any of the Unions, shall be subject to the terms set out in this LO Memorandum of Understanding. For greater certainty, such employees shall be Nrequired to contribute 9% of covered payroll (excluding overtime) and the Q Employer shall be required to contribute 11.4% of covered payroll (excluding N overtime) on behalf of such employees. In addition, where benefits herein are distinguished between (i) CUPE 18 and CUPE 486 members, and (ii) IAFF and csb SJPA members, such employees shall be entitled to benefits on the same basis as the CUPE 18 and CUPE 486 members. However, any such employees who were emplayedIAFF members or SJPA members in Public Safety Occupations before 0) accepting a non union position may elect to contribute 12% of covered payroll 0 (excluding overtime) (and the Employer will contribute 15.2% of covered payroll (excluding overtime)) and receive early retirement benefits on the same basis as 17�- the IAFF and SJPA members in Public Safety Occupations. (h) Prior to the Conversion Date, the Employer shall pay any outstanding H contributions receivable to the City of Saint John Plan by the Employer, including Q n -13- and any additions unpaid required special payments and employer current service costs up to the Conversion Date. (i) Reciprocal transfer agreements in effect as at the Conversion Date shall be suspended as of the Conversion Date. The Board of Trustees shall have the power to enter into reciprocal agreements with the sponsors of other pension plans from time to time. Such agreements may provide for the transfer of funds in respect of an employee who transfers from one pension plan to the other and may also provide for the transfer of some or all, of the employee's credited service. (j) Prior to the Conversion Date, Employees may purchase service (including past service, refunded service, service in respect of periods of leaves of absence or other leaves) under the terms of the City of Saint John Plan. On and after the Conversion Date, purchases of service (including purchases of past service, refunded service and service in respect of leaves of absence or other leaves) shall be suspended. The Board of Trustees shall have the power to determine rules regarding purchases of service under the City of Saint John Shared Risk Plan, which rules must be based on the principles underlying the City of Saint John Shared Risk Plan. Initial rules regarding purchases of service must be adopted by the Board of Trustees by no later than one year from the Conversion Date. ARTICLE V GENERAL 5.1 Counterparts a O This Memorandum of Understanding may be executed in any number of counterparts (including by way of facsimile) and all of such counterparts taken together will be deemed to N`m constitute one and the same instrument. N r O N IN WITNESS WHEREOF, each of the signatories hereto has caused this Memorandum M�of Understanding to be signed by its respective duly authorized officers or representatives a� as of the date first above written. E m a� H Q ry 0 n O O Tl Lo N r O N M� csb L E m a� H i n THE CITY OF SAINT JOHN Per: Name: Title: WITNESS: SAINT JOHN FIRE FIGHTERS ASSOCIATION, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 771 Name: Per: Name: Paul Stackhouse Title: President WITNESS: SAINT JOHN POLICE ASSOCIATION Per: Name: Name: Jamie Hachey Title: President WITNESS: Name: CUPE LOCAL 18, SAINT JOHN CITY OUTSIDE WORKERS Per: Name: Michael Meahan Title: President WITNESS: CUPE, LOCAL 486 Per: Name: Name: Paul Johnson Title: President .l O O 1-1 LO c� N r O N M� t� L E V 1 N� LL 0 Appendix A — Parameters Used under Risk Management Framework The risk management framework tests conducted on the City of Saint John Shared Risk Plan were carried out using the following assumptions and parameters. Any change to these parameters will change the results of the tests and the required contribution rates to meet the funding goals required by the enabling legislation. The adopted Funding Policy shall adhere to these parameters unless changes are agreed to by the Unions and Employer. Discount rate: 4.5% per annum with future discount rates to be determined consistent the objectives of the plan Mortality basis: UP -94 Generational Table using a projection scale reflecting the most recent life expectancy improvement data. In the future, this assumption will be changed as may be required to reflect latest available information on life expectancy. Other assumptions: Current valuation assumptions except that retirement pattern assumptions were adjusted to allow for the anticipated effect of the retirement rules considered in the costing. Retirement rules: Unreduced at age 60 for IAFF and SJPA members with a reduction of 6% per year early, only applicable to service on or after the Conversion Date. Unreduced at age 65 for CUPE 18 and CUPE 486 members with a reduction of 6% per year early, only applicable to service on or after the Conversion Date. Funding level: Measured using the 15 year open group method. Valuation assets equal to the market value of assets plus the present value of excess acontributions over the normal cost for base and ancillary benefits CD other than potential future COLA divided by the total liabilities, R both at the relevant valuation date. rll LO Initial contributions: The level of initial contributions is set at 9% of covered payroll N (excluding overtime) for CUPE 18 and CUPE 486 Employees, c 12% of covered payroll (excluding overtime) for IAFF and SJPA N Employees and Employer contributions shall be 11.4% of covered payroll (excluding overtime) on behalf of CUPE 18 and CUPE 486 csb Employees and 15.2% of covered payroll (excluding overtime) on behalf of IAFF and SJPA Employees, representing an average Employer contribution rate of 13.0% of total covered payroll (excluding overtime). A different retirement rule or change to other parameters would lead to a different contribution level. Temporary Contributions: TheCommencing April 1. 2013. the Employer shall make temporary contributions of 17% of covered payroll (excluding overtime) that will cease in 15 years or when the plan achieves a Q minimum funding level of 150% of liabilities using a 15 year open < group method, if earlier, provided that under no circumstances 0 -z- shall such temporary contributions cease before 10 yeafs ftam the Gefwer-sien Date,April 1, 2023, subject to the Income Tax Act. In the event that the Income Tax Act requires the cessation of such temporary contributions prior to the expiry of the 10 year period, once such contributions are again permissible under the Income Tax Act, they shall re- commence until an aggregate 10 years of such temporary contributions have been made. The Emplo e its sole discretion, shall be allowed to contribute temporary contributions in advance. Such advanced temporary contributions shall be credited with the net fund rate of return, and shall be used to satisfy the Employer quirement to make future temporary contributions when they become due, subject to the enabling legislation and the Income Tax Act. Contribution increases: Initial contribution rates are subject to an increase should two future valuations in succession reveal a funding level of less than 100% (with such funding level including the present value of 15 years of excess contributions, but excluding any such increase). Should this occur, Employee initial contribution rates will be increased by 25 %, with this increase being capped at 2.75% of covered payroll (excluding overtime). Any such increase will be 100% matched by the Employer. Any such increase will be eliminated once a future valuation reveals a funding level greater than 105% (with such funding level including the present value of 15 years of excess contributions, excluding any such contribution increase). Contribution decreases: initia1Subject to the priorities established in the funding excess a utilization plan in the Funding Policy (discussed below)-, initial °o contribution rates are subject to a decrease should a future P valuation reveal a funding level of 150% or over (with such Lm funding level including the present value of 15 years of excess M contribution, but excluding any such decrease). Should this occur, r Employee initial contribution rates will be decreased by 1.5% of N covered payroll (excluding overtime). Any such decrease will also M� apply to the Employer initial contribution rates. Any such decrease will be eliminated once a future valuation reveals a funding level of less than 140% (with such funding level including the present value of 15 years of excess contributions, excluding any such decrease). a� COLA Annual allocation of funding excess for purposes of granting COLA is 1 /5th of the excess funds that make up the difference between the open group funding level at the valuation date to a maximum of 140% and 105 %, provided there are no contribution V— increases in effect. Funding excesses above 140% would first be Q used to recapture any COLA not previously granted up to the ry 0 a H Q ry 0 -3- Income Tax Act limits in a manner that, to the extent practical, gives priority to recapturing missed COLA in the order in which it was missed. COLA applies to all members in equal proportion regardless of status at the date COLA is granted. ra!rs���ss!�!*s . rrs! Frei !��r�rr�rii�.E�:er�rrs�s�sse�� 101 M-1 i� Target Asset Allocation: Initially, 50% Fixed Income, 30% Equity, 10% Real Estate and 10% Infrastructure. Deficit recovery plan: Based on the following steps applied in succession until funding goals are met: (1) Increase contributions as allowed under the Funding Policy; (2) Reduce base benefit accrual rate for future service after the date of implementation of the deficit recovery plan by not more than 5 %; (3) Reduce base benefits on a proportionate basis for all members regardless of membership status for both past and future service in equal proportions. If steps (2) and (3) are implemented, then priority must be given to reversing these changes in reverse order of application before any future COLA is granted. Excess Utilization elan: After the priorities set out in the enabling legislation. the first priority shall be COLA on career average and pension benefits for current year. The second priority shall be COLA on career average and pension benefits for any past years that were missed. The third priority shall be improvements in ancillary benefits. The Unions. in their sole discretion, may determine the priorities of ancillary benefit improvements to include in the Funding Policy up to those that are comparable to the ancillary benefits under the City of Saint John Plan. In addition. the Unions may include in the Funding Policy a reserve for future COLA for up to 10 years as permitted under the enabling legislation. As a fourth priority. potential contribution rate decreases for both Employees and the Employer based on the following: • Contribution rates may decrease only if a valuation reveals a funding ratio of 150% or greater: • If this occurs. Employee contribution rates will be decreased by 1.5% of pay: \6146841 O O Tl LO N r O N M�r tLb L V lv�- 11' 1 NQ LLB n -4- • Any such decrease will be 100% o matched by the Employ and shall reduce first the Employer's temporary contribution rate if temporary contributions are still in effect at the time of the decrease; and • Any such contribution rate decreases will be eliminated once a future valuation reveals a funding ratio of less than 140 %. Document comparison by Workshare Professional on Thursday, December 13, 2012 12:06:26 PM Input: Document 1 ID Powerpocs: //GOODMANS/6146841/5 Description GOODMAN S- #6146841- v5- city_of_saintJohn_- Deletions clean version of mou Document 2 ID Powerpocs: //GOODMANS/6146841/6 Description GOODMAN S- #6146841- v6- city_of_saintJohn_- Style change clean version of mou Rendering set Goodmans STANDARD - STRIKEOUT Legend: Insertion Deletion Moved Moved to Style change Format change L_ kjfl Inserted cell Deleted cell Moved cell Split /Merged cell Padding cell Statistics: Count Insertions 46 Deletions 28 Moved from 1 Moved to 1 Style change 0 Format changed 0 Total changes 76 :Z) REPORT TO COMMON COUNCIL December 12, 2012 His Worship Mayor Mel Norton and Members of Common Council Your Worship and Councillors, Subject: 2013 General Fund Operating Budget Mk I. 71,2 C3y of SW t )oha The purpose of this report is to propose a 2013 General Fund Operating Budget and a property tax rate of $1.785. The Context Priorities Common Council pursued a deliberate and focused approach to establishing their strategic priorities for the next four years. Citizen input was solicited at ward meetings and through a formal Ipsos Reid satisfaction survey. An economic development plan, True Growth 2.0, was formulated after extensive consultation with the private sector and other key stakeholders. Council then engaged in a priority planning exercise to set out their key objectives. At the same time, a Core Service Review process was initiated to look at comparable service benchmarks and to identify opportunities to improve services or reduce costs. While broad themes were evident, certain pressing matters came to the forefront. A compelling need to solve the pension funding issue, the importance of re- investing in road improvements, the significance of creating a livable community with enhancements to recreation services, a focused and coordinated approach to economic development and the all- important need to address the issue of Clean Water were identified as top priorities. Implementation of the policies and principles of P1anSJ were also endorsed as the vehicle to advance the well -being of Saint John and its residents through sound planning and development. Pension Funding Council, with the support of the Province of New Brunswick Task Force, commissioned an analysis of a Shared Risk Pension model as a means of rendering the pension plan both affordable and sustainable over the long -term. The City has already accrued a $195M liability and the funding situation has been deteriorating for a number of years. Page 2 The Task Force reported that the current plan was unsustainable and would cost the City $26.2M per year to fund in future years with the risk of additional costs if the financial condition of the plan worsened. They assessed the option of converting to a Defined Contribution Plan and concluded that this would cost a minimum of $29M per year as the City would be obligated to retire the existing $195M liability and contribute to the Defined Contribution Plan. Their analysis of the Shared Risk model indicated that total annual plan contributions could be reduced to $16AM and that the City's risk exposure would be limited to an additional 2.75% of payroll if the plan condition worsened. The Task Force recommended that the City adopt the Shared Risk Model. The City has provided $22.7M in the 2012 operating budgets for the General Fund and Water Utility and with a move to the Shared Risk option (with the deferral) the City's General Fund portion of the savings would result in an immediate reduction of approximately $4,340,000 in the required contribution to the pension plan in 2013. A portion of the projected savings must be used to absorb the cost of existing LTD claims which will no longer be an eligible expenditure in the SRP model. The total annual cost will amount to $1.97M of which all but $191,000 will be in the Operating Budget. This payment obligation will diminish with time as the beneficiaries turn 65 and move to regular pension status. The City was unable to conclude the pension reform process as planned in 2011 and therefore was obligated to contribute more than originally budgeted. This translated into a net shortfall of $3.6M in the overall 2011 financial results. While the required amounts have been paid to the plan, the City has requested an `accounting' deferral that would allow the contribution to be recognized over an extended number of years. This will avoid a substantial deficit in 2011 and allow the savings from the Shared Risk Plan to be re- invested in needed services. The 2013 Operating Budget as presented is predicated on the City adopting the shared risk approach and securing the requested accounting deferral. Plant/ Clearly, implementation of PlanSJ offers a transformative opportunity for our community. It establishes a well - defined baseline for future policy development, targets higher density development and future growth in the primary development area and yet still provides a range of rural, suburban and urban lifestyles for citizens to choose from. It is also evident from the Core Service Review that future deliberations on service delivery will have to consider service level options both inside and outside the primary development area. This will be an evolving debate but it offers the potential for lower costs as well as more effective and more efficient service delivery. PIaySJ The preliminary results of the PIaySJ review concluded there is an over - abundance of parks and playgrounds and as a result, the quality of the facilities has been compromised. It points to the need to concentrate on improving quality rather than quantity. The P1aySJ report will be released shortly and an opportunity for public input will be provided. It is anticipated that little used or Page 3 substandard facilities will be taken out of service in favour of allocating the available resources to those that are in active use and can serve larger areas. Fiscal Responsibility An overarching theme during Council's deliberations was the need to act in a fiscally responsible manner. In practice this means living within the available revenue envelope, avoiding a tax rate increase, focusing on the long -term interests of the community, managing our debt obligations, balancing expenditures to ensure that a range of community needs are addressed and ensuring that short -term decisions do not compromise our ability to respond to new opportunities or address emerging challenges. The availability of additional funds does not eliminate the need to exercise good judgment in the use of public funds. The base budgets for each service area were prepared on the assumption that current service levels would not increase. In other words the savings and reductions applied in previous years will be retained. The proposed budget provides for selective service enhancements based on Council's priorities and the public feedback during the community consultations. Revenues The City is legally obligated to present a balanced operating budget. Effectively, expenditures cannot exceed the available revenues. The three main sources of revenue for the City are property taxes, the Community Funding grant transfer from the Province and proceeds from the sale of services. Total revenues are projected at $147,914,458 for 2013 an increase of 3.272M$ or 2.26% over 2012 with $118,239,743 derived from property taxes at the current $1.785 tax rate, $18,579,923 from the Provincial transfer and $11,094,792 from levies, fines and the sale of goods and services. There are no increases in service charges for recreation, parking, building permits or development applications proposed in this budget. Expenditures The 2013 operating budget proposes total expenditures of $147,914,458. Approximately $2.65 million was necessary to simply absorb increased costs of wages, insurance, fuel and other base expenditures. Each department's service based budget submission documents the planned service objectives and required resources for next year. The focus areas for the proposed budget directly reflect the priorities established by Common Council and our statutory responsibilities. The more significant allocations and adjustments proposed for 2013 are noted below. Page 4 Pension — the proposed budget is predicated on the City eventually adopting the Shared Risk Pension Model. The SRP model requires minimum funding of 30% of payroll or $16.4M million. There is also a necessity to transfer the annual cost of LTD benefits ($1.78M), which are not permitted under the SRP approach, from the pension plan to the operating budget. The net impact is a year over year cost reduction for pension of $2.56M for 2013. The cost sharing mechanism for an insured LTD plan has yet to be determined. P1anSJ — actual implementation of PlanSJ requires revising the Building Bylaw, Zoning Bylaw, and Subdivision Bylaw, establishing Infrastructure Guidelines and creating a Stormwater Bylaw as well as amending the Water and Sewerage Bylaw. This is a complex and involved process that is dependent on having qualified and capable professional resources. This is not a process that can be left to evolve over an extended number of years. Rather it is important that the development community understand the rules of the road and it is equally important that the policies be well defined so that the desired process improvements can be properly formulated. The 2013 budget retains a full staff complement in the Growth and Development Department and provides an additional $180,000 for two contract positions to assist in moving these various elements forward on a timely basis. It is anticipated that legal services will be directly impacted by the additional workload and a lump sum of $50,000 has been provided to secure supplemental resources. Roads and Sidewalks — there is universal recognition that additional work needs to be undertaken to improve the overall condition of our road and sidewalk network. The City Engineer has advised that in order to target a Pavement Condition Index of 80 the 2013 operating budget would have to be increased from the current $11M to $4.4M. In addition, the operating budget for curb and sidewalk work would have to be increased by $150,000. Both envelopes are increased accordingly. It is recommended that the current level of service for sidewalk snow plowing remain at the current 61 % coverage target. Recreation and Parks Services- a range of quality recreation opportunities for children, adults and seniors is a fundamental necessity in a livable attractive community. The budget contemplates providing a free recreation component at each of the community centers ($60,000), a partnership with ONE Change to operate the Nick Nicolle Community Centre ($30,000), enhancing youth participation ($72,500) with additional casual resources, summer operation of Mispec Park ($45,000) and Lifeguard services extended until September 2nd ($30,000). Transit — The base budget for the Transit Service necessitates a $947k funding increase just in order to cover recurring debt charges and other inflationary adjustments. It is proposed that an additional $350,000 be allocated to the service to specifically target evening sen-ice in priority neighbourhoods, the Hospital/UNB route and morning service. It is projected that this extra funding will yield approximately 7 -8,000 additional service hours. The Transit Commission will be required to present Council with a detailed implementation plan including not just service hours but also ridership usage as well as demonstrating how service improvements are consistent with the P1anSJ direction and identify any needed capital investments prior to accessing the additional funds. Funding in subsequent years is intended to be dependent on successful achievement of desired outcomes. Economic Development — the adoption of True Growth 2.0 and Council's stated priority to have an integrated and coordinated approach to Economic Development will create new opportunities Page 5 for the community and the region. It is proposed that the Economic Development envelope be increased by $143k to $2.3M with the additional funding going to Enterprise Saint John in order to allow it to take a leadership role in the implementation of the True Growth 2.0 initiative. New wealth creation and tax base growth will provide the revenues needed to deliver affordable services in the future. Given the changing role of the Provincial development agencies, it would be appropriate to request an updated Service Level Agreement from ESJ showing how their efforts will complement the new mandate of the Provincial development agencies. Dangerous Building Enforcement — The budget provides for an increase in resources ($195k) in order to double the enforcement program (dangerous /vacant/unsightly). Enforcement activity protects the residents of these buildings, reduces the risk to neighbouring properties, improves neighbourhood safety and encourages owners to take timely remedial action on at risk buildings. The question of how to encourage new development or to just improve the appearance of vacant lots will have to be addressed in due course. Arts Culture Activities — a thriving arts and culture scene is a hallmark of a vibrant and livable community. The proposed budget retains commitments to the Arts Centre ($75k) and Imperial Theatre ($337k) through the Regional Facilities Commission and also includes funding for the Saint John Theatre Company ($10k), Salty Jam ($20k), the Fundy Fringe Festival ($5k), the Regional Library ($456k), the National Basketball League of Canada All Star Game ($5k) and the Community Arts Board ($35k). Community based activities on Canada Day, New Year's Eve, as well as the Mayor's Levee will also be funded. Neighbourhood Support — the base budget contained a $152,250 funding envelope to provide support to the various associations and development groups particularly in the priority neighbourhoods. The City will be moving from a direct program provider to a program facilitator role in the delivery of recreation programs with greater emphasis on community engagement. It is proposed that an additional $50,000 be provided to deliver community development grants that could be used to leverage additional private sector or community support for needed programs. A means of determining the return on investment for this type of financial support is currently being studied by graduate students at LTNBSJ. Regardless of the methodology Council should be looking for solid outcomes from each of the organizations benefitting from this financial support. Fire Service — the first draft of the Fire Service budget includes the full amount for the arbitrated wage settlement. In effect, this group of employees would have avoided the wage freeze requested and adopted for all other employee groups. This creates a fundamental inequity between the wage treatment of the employee groups that cannot be ignored. It is proposed that the departmental budget be adjusted on the assumption that there were no wage increases for the members of Local 771 in 2011 and 2012. This would result in a reduction of the initial funding request by $560,000 for 2013. The vast majority of fire service costs are salary related and this adjustment will mean a consequent reduction in staffing strength in the department. The Fire Chief will develop a staffing plan in line with the proposed level of funding. City Clean Up — there continues to be interest in re- instating the City wide spring clean-up program. It is estimated that this service would cost approximately $380k annually. Staff are Page 6 suggesting that given the availability of the large item pick -up service and the white goods drop - off program it may be more beneficial to the entire community to first explore the potential for curb side pick -up of recyclables. Once a cost comparison is completed Council can consider the available options for the 2014 Budget year. Value for Money — each year the City identifies a service area for an in -depth value for money review. In 2011, a Fleet Review was undertaken and in 2012 a Mobile Communication Services review was completed by our IT department. It is proposed that a value for money review of Legal Services be undertaken in 2013. This review will not require additional funding. Instead it is proposed that we move to a bi -annual Ipsos Reid satisfaction survey and redirect the available funds ($50,000) for the value for money project. Should sufficient funding be available it is suggested that Engineering Services also be reviewed. The Citizen survey would then be undertaken in 2014 and again in 2016. Corporate Strategic Plan — Common Council has identified its priorities for its term of office. It is now imperative that the organization fully embrace and implement these key goals. A review and update of the Corporate Strategic Plan will ensure that corporate plans and initiatives are supportive of and contribute to Council's objectives. It will also provide a clear and common understanding across the organization of our overall direction, priorities and objectives. The plan will require limited outside resources ($25k) and will be led by our Corporate Planning staff. Core Service Review — The second phase of the Core Service Review will begin in 2013 with a budget of ($50k). The information gathered will provide peer benchmarks, identify opportunities for additional revenue, new approaches to service delivery and generally assist in challenging the status quo. Implementation of the results of the first phase of the review will also begin next year with particular attention to: • Triggers for multi -level Medical First Responder Calls in the Fire Service • Winter day time vs night time shift deployment for snow removal • Arena staff redeployment — daytime operations • Turf maintenance with consolidation and new remote operation site • Seek the cooperation of the Board of Police Commissioners on a 3 year civilianization Plan for Police Services with cost reduction targets • Begin public consultation on right sizing of parks /playgrounds /fields YM -YWCA — the City has agreed to provide property to facilitate the development of the new YM -YWCA. This facility will introduce a marked increase in services in the Crescent Valley area and will also allow the City to refine its program delivery in this neighbourhood. The Y has requested that they be provided relief from the building permit and plumbing fees. It is estimated that their costs will total approximately $175,000. The City cannot exempt individuals or organizations from such fees however it can provide a grant to offset the cost incurred. The budget will show revenue for the permit fees and a grant for the same amount in the expense budget. Regional Service Commission — the Province of New Brunswick has begun implementation of Regional Service Commissions across the Province, including the Greater Saint John area, as Page 7 part of its Local Governance Reform process. The Commission will initially be responsible for solid waste management, regional planning and EMO planning. It is hoped that a formal regional structure will also lead to more sharing of services at the regional level. The City's contribution to the 2013 Commission is $42,054. Revenue Opportunities — the City introduced increases to ice time rates and development fees during 2012 as well as a small increase in parking meter rates. The primary focus in 2013 will be to pursue contracted service rates with other agencies. The Fire Service has identified some potential revenue generation opportunities and will be developing a bylaw for Council's consideration. Tax Rate Reduction The potential for a tax rate reduction was raised in the context of potentially offsetting some of the proposed increase in water rates. The water rate issue has Iargely been mitigated in the revised rate submission. A tax rate reduction is much like a corporate dividend in that it should not be extended unless there is certainty that it can be sustained for an extended period. The decision to provide a tax reduction rests with Council but should be made in full consideration of the current and projected financial position of the City. More particularly, the City will be facing reductions in the order of $350 -400K per year in the provincial grant transfer in both 2014 and 2015. In addition, the rate of tax base growth is expected to slow given the relative lack of major development in the community. As well, because of the significant increases to the pension contribution envelope in recent years there is a real service backlog in various service areas (transit, recreation, roads etc.). Finally, we are only in the first year of the pension reform process and some financial flexibility should be retained until all the implications are fully known (LTD, deferral, Market returns etc.) It is staff's opinion that the financial position of the City first be fully stabilized and that a tax rate reduction be considered only when there is more certainty with respect to the concerns previously noted. Establishment The approved establishment sets out the number of permanent employee positions included in the budget and acts as a control mechanism for Council in that any change in the total number of permanent positions requires Council approval. It is proposed that Common Council adopt a resolution establishing the number of permanent positions funded in the budget at 647 for the coming year (a net reduction of two positions). Wage Increases The operating budget includes contracted wage increases for our unionized employees as set out below. A 2.5% wage adjustment for the management, non -union and professional employees is proposed for 2013 but is proposed to split into a 1.25% adjustment on January 0 and a further 1.25% adjustment on July 1st. Phasing the adjustment in over 6 months reduces the budget Page 8 impact to approximately 2% in 2013. With the exception of Local 771, each of the unionized groups has had a two year wage freeze applied to their scheduled adjustments. The non -union group has had three years of wage freezes in the last four years. City of Saint John - Comparative Salary Increases 2005 - Present Year Management Local 486 Local 771 Local 18 SJPA % Increase % Increase % Increase % Increase % Increase Expiration of Dec 31, Collective 2014 Dec 31, 2014 June 30, 2014 Dec 31, 2012 Agreement 2005 2.90% 3.00% 400% 2.75% 4.00% 2006 3.00% 3.00% 400% 2.75% 4.00% 2007 3.25% 3.00% 600% 3.25% 4.50% 2008 2.50% 3.50% 575% 3.25% 5.75% 2009 0.00% 3.25% 4.50% 3.50% 4.50% 2010 0.00% 3.25% 450% 3.25% 5.25% 2011 2.90% 3.00% 2.00% 0.00% 0.00% 2012 0.00% 0.00% 2.00% 0.00% 0.00% 2013 2.50% 0.00% 4.00% 3.00% N/A 2014 N/A 1 2.90% 4.00% 1.50% N/A Total 1705% 2490% 4075% 23.25% 28.00% Annual Avg 1.89% 249% 408% 233% 3.50% Citizen Responsibility The City continues its efforts to identify efficiencies and cost reductions in its day to day operations. Citizens also have a role to play in helping to control service delivery costs. Off street parking during winter storms directly reduces snow clearing costs, recycling plastics and metals reduces our solid waste charges at the landfill, using the compost bin reduces our costs by another $75 per tonne. Likewise, fixing faulty alarm systems reduces the waste of fire and police resources. Individual actions may not seem like they make a difference but taken across the community it does make a significant difference. Conclusion With the exception of the new costs for the City's share of the Regional Service Commission, each of the enhanced investments is intended to contribute to the achievement of Common Council's priorities and to respond to identified community needs. Council identified three broad focus areas when establishing its priorities: Economic Health, Community of Choice, and Sustainable Infrastructure. Enhanced enforcement of the dangerous and unsightly bylaw provisions coupled with new emphasis on recreation programming, arts and Page 9 culture activities and improved transit services will all contribute to creating a vibrant and livable community. The pension reform, value for money review, Core Service Review and the updated Corporate Strategic Plan will help to ensure that public resources are used in a responsible manner and maintain a healthy financial position. The major new investment in road repairs will benefit the entire community with improved infrastructure while continued support for priority neighbourhoods will support revitalization of these areas. Finally the commitment to a coordinated economic development strategy and aggressive implementation of the core elements of P1anSJ will help to create new wealth in the community and create the environment for sound development in the years ahead. Recommendation It is recommended that Common Council approve the 2013 Operating Budget for the General Operating Fund and adopt the following resolutions: Therefore be it resolved: 1. That the sum of $147,914,458 be the total operating budget of the City of Saint John for 2013; 2. That the sum of $118,239,743 be the Warrant of the City of Saint John for 2013; 3. That the tax rate for the City of Saint John be $1.7850; 4. That Common Council orders and directs the levying by the Minister of Environment and Local Government of said amount on real property liable to taxation under the Assessment Act within the City of Saint John; 5. That Common Council authorizes the Commissioner of Finance and Administrative Services to disburse, at a time acceptable to him, to the named Commissions, Agencies, and Committees, the approved funds as contained in the 2013 budget; 6. That Common Council approves the 2013 Establishment of Permanent Positions at 647; and 7. That Common Council approves an increase in the 2013 Management Professional Pay Scale of 1.25% on January 1st, 2013 and 1.25% on July 1st, 2013. Respectfully submitted, A%VLOIL� J. Patrick Woods CGA City Manager 12/12/2012 The City of Saint John 2013 Budget Summary 2013 2012 PROPOSED BUDGET BUDGET VARIANCE Total Expenditures: $ 144,642,653 $ 147,914,458 $ (3,271,805) Less: Non -Tax Revenue: $ (11,219,478) $ (11,094,792) $ (124,686) $ 133,423,175 $ 136,819,666 $ (3,396,491) Unconditional Grant $ 18,918,728 $ 18,579,923 $ (338,805) Net Budget $ 114,504,447 $ 118,239,743 $ (3,735,296) Tax Denominator $ 6,414,814,937 $ 6,624,075,264 Tax Rate $ 1.7850 $ 1.7850 City of Saint John 2013 Budget Summary 2012 2013 2013 Approved Base Budget Adjustments For Approval Comments 2012.12.12 "Growth & Development Contract positions to move PlanSJ bylaw completion Community Planning & Development Service 1,493,282 1,356,837 230,000 1,586,837 forward - $50,000 included for Legal Development Engineering 372,287 361,523 361,523 Geographic Information Systems 285,314 311,563 311,563 Heritage Conservation 317,672 300,994 300,994 Permitting & Inspection Service 960,142 993,679 993,679 By -Law Enforcement Service 655,645 758,885 953,885 Dangerous Bldg - one new position, demolition, Dangerous and Vacant Building Program 137,341 281,692 195,000 476,692 legal support Minimum Property Standards Program 269,646 237,671 237,671. Other By -Laws 168,343 156,779 156,779 Animal Control 80,315 82,743 82,743 Tourism Service 845,000 845,000 845,000 Destination Marking Organization 345,000 845,000 845.000 Economic Development Service 2,183,237 2,190,231 2,333,231 Regional Economir. Development (Enterprise) 332,000 332,000 143,000 475,oao ESJ - enhance role to pursue True Growth 2.0 Saint John Trade and Convention Centei 570,283 536,576 536,576 Harbour Station 374,662 384,390 384,390 City Market 906,292 937,265 937,265 Urban Development Service 2,343,939 2,553,352 2,553,352 SarntJohn Development corporation 160,000 160,000 160,000 Waterfront Development Corporation 95,000 120,000 120.000 Market Square - Common Area 2,088,939 2,273,352 2,73,352 Regional Service Commission 42,054 Industrial Parks Development Service 300,000 300,000 SaintJohn Industrial Parks 300,000 300,000 Total Growth & Development Services 9,756,518 10,014,118 Legislated responsibility - city share determined by 42,054 formula 300,000 300,000 10,582,118 Neighourhood Improvement 639,836 655,692 705,692 Establish community development grants to Community Development 314,663 316,053 50,000 366,053 leverage programs with neighbourhood groups City of Saint John 2013 Budget Summary Neighbourhood Development Loch Lomond Community Center Ability Advisory Committee Recreation Community Gioups P R 0 Kids Community Development Service Grants Pavilion Cup Cherry Brook Zoo Library UNBSJ Capital Campaign 22 Seniors Citizen Centre Rent Human Development Counril Human Development Council Rent PRUDE Rent Seafarer's Mission Senior Resource Center Recreation, Parks & Cultural Programming Recreation Programming Contract Service - Boys & Ga ls Club Contracted Sei vice - YMCA -FGCC /MCC North End Community Centre Cultural Affairs Arts & Culture Grants & Other Funding Imperial Theatre Saint John Arts Center Saint John Community Arts Board Public Art - Maintenance and Repair Budget NB Arts Board (Public Art Reserve) Fundy Fringe Festival Jazz and Blues Festival - Salty lam Saint John Theatre Company Festival de la Bare Francais New Year / Canada Day Celebrations Remembrance Day Ceremonies 2012.12.12 2012 2013 2013 Approved Base Budget Adjustments For Approval Comments 250,000 152,250 152,250 45,000 45,000 45,000 1,500 1,523 1,523 30,000 30,450 30,450 98,673 110,416 110,416 666,765 666,765 666,765 ',500 2,500 2, 500 60,035 60,035 S0, 0.35 456,230 456,230 456,230 41,000 41,000 41,OOC 35,000 35,000 35,000 16,000 16,000 16,000 52,000 52,000 52,000 1,000 1,000 1,000 3,000 3,000 3 000 1,254,034 1,350,571 1,513,071 915 460 1,010,655 7Z500 1,083,155 5 sessionals -more youth programming 122,400 124,236 124,236 105,126 105,703 50,000 166,703 Establish free programs 30.000 30.000 Half year operation by One Change 111,048 108,977 108,977 539,584 555,861 560,861 32QB17 337,039 337 039 74,767 74,822 74,822 30,000 35,000 35,000 15,000 15,000 15,000 10,000 .5,000 5,000 20,000 20,000 20,000 10,000 10,()00 10,000 4,000 4,000 4,000 15,000 15,000 15,000 2,000 11,000 2,000 City of Saint John 2013 Budget Summary 2012 2013 2013 Approved Base Budget Adjustments For Approval Comments 2012.12.12 NS Historical Society - Loyalist House 10,000 10.000 10,000 Unspecified Grants 23,000 28,000 28,000 National Basketball League All Star 5,000 5,000 Sculpture Symposium 5,000 - Water Supply and Hydrants 2,200,000 2,270,000 2,270,000 Fire Services 20,629,263 20,683,989 20,123,989 Assumes 0,0 for 2011 & 2012 with current Fire Rescue and Suppression 19,446,868 19,428,400 550,000 18,868,4+'10 establishment Medical First Responder 71,640 86,000 86,000 Hazardous Materials Emergency Response 115,413 121,428 121,428 Technical Rescue Response 55,981 63,608 63,608 Fire Prevention 918,761 963,498 963,498 Fire Investigation 20,600 21,055 21,055 Emergency Management Service 334,304 325,421 325,421 Police Services 22,724,065 22,777,842 22,777,842 Public Safety Communications 2,292,610 2,491,853 2,491,853 Street Lighting 1,070,000 1,075,350 1,075,350 Total Urban Environment Services 52,350,461 52,853,344 52,510,844 Transportation & Environment Service Roadway Maintenance Service 13,158,400 13,561,415 14,861,415 Snow Control Streets 4,433,349 5,000,889 5- 000,889 Street Cleaning 1,783,921 1.749,414 1.749, X14 Street Services (Surface Maintenance) 6,941,130 6,811,112 1,300,000 8,111,112 Road repairs and maintenance Sidewalk Maintenance Service 1,319,949 1,410,490 1,560,490 Snow Control Sidewalk 762,202 893,257 893,257 Sidewalk Maintenance 557,747 517,233 150,000 667,233 Curbing to allow for road re- instatement Pedestrian & Traffic Management Service 1,620,138 1,684,800 1,684,800 Storm water Management 3,324,138 3,366,348 3,366,348 Solid Waste Management 3,965,640 3,568,529 3,568,529 Engineering 459,351 541,451 541,451 Parks & City Landscape 2,456,817 2,654,268 2,729,268 Parks Maintenance 2,084,961 2,237,921 2,237,921 Lifeguards 117,720 30,000 147,720 Extend service to Sept 2nd City of Saint John 2013 Budget Summary Urban Forestry Mispec Saint John Horticultural Association Sports & Recreation Facilities Service Arena Operation & Maintenance Sports field Operation & Maintenance Other Facility Operation & Maintenance Sport Administration Minor Hockev Subsidy Aquatic Clubs Lord 8eaverbrook Rink Aquatic Centre Saintlohn Track Club Parking Service (Administration Support) Transit Service Environment Committee 2012 2013 2013 Approved Base Budget Adjustments For Approval Comments 2012.12.12 331,856 258,627 258,627 Financial Management Service 45,000 45,000 Contracted operation plus maintenance 40,000 40,000 40,000 3,395,542 3,659,644 3,659,644 1, 254, 898 1,442,420 1,442,420 1,208,259 1,325,655 1,325,655 297,655 362,130 362,130 68,879 971,819 971,819 150,000 165,000 165,000 15,361 15,822 15,822 154,000 154,000 154,000 231,490 194,617 194,617 15,000 997,856 _ 530,845 560,379 560,379 5,570,256 6,517,991 350,000 6,867,991 Enhanced service evenings, UNBSJ /SJRH, mornings 1,520 - 1,979,795 Total Environment & Transportation Services 35,802,596 37,525,315 39,400,315 Finance . Administrative Financial Management Service 3,106,115 3,247,518 3,247,518 Finance 1,861,641 1,962,447 1,962,44.7 Assessment 1,244,474 1,285,071 1,285,071 Asset Management 6,577,469 6,629,116 6,641,116 Purchasing & Materials Management 1,082,953 971,819 971,819 Insurance 157,977 157,977 Liability Insurance 633,605 596,700 12,000 608.700 Agency fee increase Fleet 1,231,969 1,081,392 1,081,302 Facilities Management 997,856 1,031,337 1,031,337 Caipentry Shop 466,896 438,876 438,876 City Hall Budding 1,766,204 1,979,795 1,979,795 Real Estate 397,986 371,310 371,310 Total Administrative Services 9,683,584 9,876,634 9,888,634 2012.12.12 City of Saint John 2012 2013 2013 2013 Budget Summary Approved Base Budget Adjustments For Approval Comments Strategic Services Human Resources 1,289,937 1,428,037 1,428,037 Includes 100,000 for ISN investigation Corporate Planning 505,331 499,585 499,585 Intergovernmental Affairs 143,151 148,658 148,658 Corporate Communications 521,346 521,505 521,505 Information Technology 1,946,235 2,087,058 2,087,058 Total Strategic Services 4,406,000 4,684,843 4,684,843 City Manager 399,574 401,268 401,268 Legal 823,759 703,834 703,834 Common Clerk 813,130 735,400 735,400 Mayor & Council 629,130 565,785 585,785 Mayor's Office 201,630 183,305 183,305 Council 427,500 382,480 20,000 402,480 Weekly Council - translation /meals Total Legislated Services 2,665,593 2,406,287 2,426,287 Other Charges Fiscal Charges 15,757,821 16,333,837 426,757 16,760,594 To be used to fund capital projects LTD Payments 1,780,743 1,780,743 Annual estimated cost of current LTD pensions Pension 14,220,080 14,220,080 (4,340,000) 9,880,080 Assumes deferral approved and SRP adopted Total Other Charges 29,977,901 30,553,917 28,421,417 Total Budget (Expenditures) 144,642,653 147,914,458 147,914,458